Reading the initial updates on the Immigration New Zealand (INZ) website I was very concerned, so concerned in fact that I immediately wrote to the Immigration Minister to ask for clarification. You can download a copy of my letter here[446 Kb]. I will let you know if I get a reply.

Here are some points to consider that will affect a great many people and a look at what is being gained through these changes.

When will existing applications be processed?

What the immigration website indicated was that new applications under Tier One of the Parent Category would go straight to the front of the queue for allocation and processing. Applications for the Parent Sibling and Adult Child Stream would be added to the queue behind these and last of all would come the new Tier Two Parent application.

Tier One applications entered under the new Parent rules;

Existing applications entered under the old rules (both ‘Parent’ and Sibling/AdultChild’);

Tier Two applications entered under the new Parent rules.

There are 4,000 places in the annual quota – that’s 4,000 people not 4,000 applications (family category applications on average represent 1.93 people). What the INZ site appears to say is that the quota will initially be filled each year from Tier One, then any additional places will be allocated to the older applications and finally any places left will go to Tier Two.

The problem is that the old Parent Category with a quota of 4,000 was always over-subscribed.

More than 4,000 places have been approved already this year and the new rules for Tier One are unlikely to reduce this number.

So after 4,000 places have been taken by Tier One applications each year what happens to the older applications and Tier Two?

This is the main issue raised in my letter and I am deeply concerned that it will be years, possibly even decades, before these applications are finally allocated for processing unless the old quota of 1,400 places for the Sibling and Adult Child Category is left in place until these are cleared.

Of course a lot depends on how many people will be sitting in that queue behind Tier One waiting to be allocated a case-officer. So just how many are there and how long would it take to clear this backlog?

Just how big is the queue?

Immigration department statistics are a little out of date, only showing to January 2012 but more recent figures are shown each fortnight on the release showing numbers of Expressions of Interest selected under the Skilled Migrant Category.

At the bottom of the page this confirms that on May 16th the INZ had 6,406 applications entered under what is now the old Parent Sibling and Adult Child Category representing 12,348 people.

News stories have confirmed that the INZ accepted 7,400 applications before closing this Category which would represent approximately another 14,264 people giving a grand total of around 26,612 people standing in the queue to be allocated a case-officer.

Even if the old quota for the Sibling and Adult Child section of the category of 1,400 was maintained (and the immigration department have indicated this will not be the case) I calculate that it would take 19 years to clear this number, a completely unacceptable length of time.

Just what the Minister proposes to do to meet promises made of less than two years before applicants are allocated a case-officer will hopefully be revealed soon. I have great faith that the Minister will uphold the integrity of his department and not leave people waiting for decades to be allocated a case-officer.

What will be gained from these changes?

I may be speculating here, but for the first time in recent history the INZ is carrying a significant deficit, calculated to be as much as $44 million by the end of June.

As the INZ’s processing work is funded through fees paid by migrants it is little wonder that the department has a deficit after the Skilled Migrant Category, making up 60 percent of all approvals, was cut by nearly a third from January 2010 – a move I calculate loses the INZ $16.7 million per year in fees and levies (not including EOI payments).

The NZ government has confirmed many times that there is no new money in this year’s Budget to be delivered soon meaning that this massive deficit (which represents nearly a quarter of the INZ’s entire budget for processing) can only be cleared either through raising the number of migrants paying fees back up to 2009 levels, or through ‘efficiencies’ that would see migrants paying more than the cost of processing their applications. It is interesting that a new EOI stage and fee have now been added for parents.

Certainly closing an immigration category bringing just 1,400 people who could not claim benefits into New Zealand each year is exceedingly unlikely to save the $40 million expected and needed to clear this huge shortfall created as a result of policy changes.

Of course letting in an additional 7,400 applications, many of which will be incomplete, will create additional delays and backlogs adding more and more pressure to INZ staff who are likely to be squeezed pretty hard to clear this massive backlog of applications.

Please bear in mind when you are talking to immigration officers that this situation has been created as a result of policy changes completely outside their control. They will be doing a very hard job while watching a new computer system being built which will be likely to replace at least some members of staff, so please take it easy on them.

A backwards step

Finally as a parting thought, although I have no issue with the government’s right to change immigration policy it is hard to regard these changes as a positive step.

Attraction of skilled migrants has suffered a huge knock with huge cuts to the Skilled Migrant residence Category and the Essential Skills temporary work category implemented intentionally since the start of 2010. These latest changes are likely to threaten retention rates through removing family support.

Although the family members targeted by these changes do not necessarily generate significant income for the New Zealand economy it is clear that they are not a drain on it. Less than 2 percent of migrants claim core benefits in New Zealand, any amounts collected by family migrants would be claimed back by government from their sponsor, and employment rates put forward as a reason to close this category show that workplace participation just amongst these family members (i.e. excluding the skilled workers) of 66 percent compares well the New Zealand average of 68.2 percent.

In my experience of working with thousands of migrants a core issue reducing retention of highly skilled workers is lack of family support at key life stages. For example when a child is born or gets sick new mothers often look for the support of their mother to get through and many have to leave New Zealand to get this.

As any family with children will know, the wider family around you makes an incredible difference. I’m not just talking about baby-sitting, but it touches everything through general support and the feeling of safety and well-being created from having people who love you and will watch out for you and yours.

Most migrants leaving speak of a feeling of vulnerability which has grown to unmanageable proportions being so far from people who love them.

Many New Zealanders will understand this very well – one of the most common times for New Zealanders to head home is when they start a family and realise home is where the heart is. It’s not just about a place, it’s about having the security of your family around you.

I believe this change to block certain parents and any other family unable to make it through the Skilled Migrant Category – so stringent that it is open only to approximately 2 percent of any population – will most certainly decrease retention rates of skilled workers who are the main contributors to the $1.9 billion to $3 billion (net of costs) added to the New Zealand economy by migrants every year.

On behalf of Tammy Bell, owner of popular migrant community website move2nz.com. A transcript of Breakfast TV’s interview with Nathan Guy on 6/3/12 is also presented below.

Nathan Guy’s competency as Immigration Minister is being questioned after data received from the Official Information Act confirmed that Guy’s inflammatory claims that a ‘third of migrants were on benefits’ were wildly misinterpreted and bore no relation to official statistics.

On March 6th the new Immigration Minister Nathan Guy was interviewed on TVNZ’s Breakfast programme to discuss the government’s plans to favour wealthy migrants. This interview has gained importance as Mr Guy has since confirmed that this conversation was the official launch of new government policy.

During the interview the Minister confirmed

“…. those [immigrants] that have been coming in previously have been very reliant on benefits. Even though they have had to have a job offer, in a lot of cases we have found that after a study we have done on the first 18 months that a third of them have ended up requiring a benefit.”

The Minister went on to say that

“Hard working taxpayers in New Zealand need to know that their money is being well invested, not spent on people sitting around on benefits”.

At a time when the government’s welfare reforms are creating pressure to reduce the number of people dependent on benefits these comments naturally caused anger and resentment to be directed towards migrants.

The Minister’s comments were unusual in that they appeared to undermine the immigration department’s long term goal of attracting high value migrants to invest their money and skills into New Zealand.

Tammy Bell, owner of popular migrant community website move2nz.com commented

“The Minister’s comments have caused alarm with many prospective migrants, who are likely to take their valuable skills elsewhere if they believe there is a one-in-three chance of being on benefits within 18 months. Considering immigration adds between $1.9 billion and $3 billion each year to our economy, his comments were extremely damaging”.

Information used by Mr Guy was taken from the Department of Labour’s Long Term Immigration Survey (LISNZ) which followed 5,144 migrants who took up residency in New Zealand between November 2004 and October 2005. Data was collected at 6 months, 18 months and 36 months after arrival.

However the LISNZ confirms in its summarised May 2009 report entitled ‘New Faces, New Futures, New Zealand’ that:

“less than 2% [of migrants surveyed] had received a core benefit”.

Responding to a request lodged by Bell under the OIA about his comments on “migrants claiming benefits, Mr Guy responded:

“only 66% of migrants who obtained residence through the Sibling and Adult Child Category reported having a job when surveyed 18 months after taking up permanent residence in New Zealand.”

Bell says she was deeply surprised by this revelation.

“How can the Minister confuse ‘not being in paid work’ with ‘claiming a benefit’? I can’t imagine what more an Immigration Minister could have done to damage New Zealand’s international reputation as a migrant destination”.

The Sibling and Adult Child Category accounted for just 2.5% of residence applications approved in the year to October 2005, however the Minister’s televised statement appeared to relate to all migrants coming to New Zealand.

“Even if a third of this small group wasn’t in full time work, where is the cost to the taxpayer?” Bell asks. “Migrants can’t claim benefits in the first two years after receiving residency and even if they did their family sponsor would be liable to pay every cent back to the government”.

Official forms signed by the sponsors of family migrants applying to come to New Zealand include a declaration that they promise to provide financial support and an acknowledgement that any costs to the government will be repaid by the sponsor or they will face enforcement and court action

The LISNZ survey confirms that of these family members not in full-time work 14% were retired, 33% were caring for dependents, and 29% were studying.

While the Minister has focussed on employment data collected 18 months into the LISNZ survey, final reports confirm that nearly 10% more of the family group were employed by the end of the study, than at the beginning. The majority of family members not in work were found to be studying or looking after dependents, not ‘requiring benefits’ as the Minister has claimed.

On May 16th, in a move presented to save government $40 million per year, Nathan Guy closed the Sibling and Adult Child categories on the basis that they did not generate “sufficient economic benefit for New Zealand”.

This move has drawn criticism and court action from migrant groups angry that changes were introduced with just three days’ notice.

According to Bell, these family members are vital to the successful settlement of high value migrants being actively attracted to New Zealand by the immigration department.

Department of Labour reports have previously confirmed that 24% of migrants intending to stay permanently leave with a major cause being lack of family support.

The immigration department is funded from migrant fees. Immigration policies introduced in January 2010 effectively cut the number of skilled workers by nearly a third, leading to a record deficit for the department calculated to reach $44 million by June this year.

Mr Guy has admitted that migrant families will be split apart by the changes he has introduced which will enable his department to recoup losses caused by the decision to significantly reduce immigration numbers, however the Minister has not offered any explanation of why his television comments were incorrect.

Summary points:

The Minister stated that a third of migrants claim benefits within 18 months.

Less than 2% of migrants from the study actually received benefits.

Migrants not in work were confirmed to be retired, caring for dependents or studying.

The Minister has used this as a reason to close the Sibling and Adult Child categories.

Experts claim this will reduce New Zealand’s appeal for high value migrants.

Immigration adds between $1.9 billion and $3 billion net of costs to New Zealand’s economy each year.

Transcript of Breakfast TV interview with Nathan Guy, 6/3/12

Petra Bagust: You’re with Breakfast, the time is 6:56. Ah we’re going to talk about immigration now, are wealthy immigrants more welcome in New Zealand. If we take the government’s plans at face value it appears the answer is ‘yes’. Immigration changes will be aimed at reducing the number of unskilled migrants who struggle to get jobs and end up on the benefit. But are they fair? Immigration Minister Nathan Guy joins me now. Good Morning Mr. Guy.

Nathan Guy: Morning Petra, how are you?

Petra Bagust: Well thank you. Why do these changes need to be made?

Nathan Guy: Well what we have found Petra is that those that have been coming in previously have been very reliant on benefits. Even though they have had to have a job offer in a lot of cases we have found that after a study we have done on the first 18 months that a third of them have ended up requiring a benefit. We want to refocus this to ensure that those that are coming in have a decent income stream with them or via their sponsor and that they can perform in our modern day economy.

Petra Bagust: Alright. As it has been suggested does it in essence create an immigration system that favours the wealthy?

Nathan Guy: Well, we make no bones about that. We want to ensure that those that are coming in to our economy can hold down a job and ensure that they perform in our economy. Hard working taxpayers in New Zealand need to know that their money is being well invested, not spent on people sitting around on benefits, and you will know that the government is talking about big welfare reform plans this year, and these changes very much line up with those.

Petra: Alright. We want to talk about high income workers. What is the definition of ‘high income’ here?

Nathan Guy: Well we’re working through what those definitions will mean and I’ll announce those in due course. In essence the changes are that parents will still be able to come in, but they will need to have some financial dependence when they arrive and that will be savings that they will bring in, or indeed they’ll have cash-flow from their sponsor. And those adult children and siblings category, that will change and they will be required to apply through the Skilled Migrant Category.

Petra Bagust: So the balance I guess is between saving money, there is an estimated $40 million dollars going to be saved, and also the success of people immigrating to New Zealand and settling here. I guess some families will be split apart because of this new legislation.

Nathan Guy: That may happen, but of course they still have the option of replying through the Skilled Migrant Category. Parents still have the option of coming in to New Zealand if they have a sponsor and if they have that financial backing that I talked about before. So I make no apologies, this government is focused on driving the economy forward. Where possible we want migrants coming that are going to perform in our modern day economy.

Corin Dann: Look I’ve got no doubt the government is trying to tweak things here to make the system a bit better, but what I don’t like is this perception that somehow migrants are coming in here and sitting around and going on benefits. I’m sure there are some instances, but let’s face it, who drives your cabs? Who serves you at the supermarket counter? I don’t know about you but most of the immigrants that I come across are working in tough jobs, doing the jobs that a lot of kiwis don’t want to do frankly.

Petra Bagust: It is an interesting little can of worms and we’re talk about again to get back to us again if you have got feedback about this issue.

As highlighted on move2nz.com earlier in the year, the report prepared for the incoming Immigration Minister Nathan Guy confirmed plans to make significant changes to the Capped Family Stream of New Zealands Residence Programme.

I will comment about the lack of honesty in the Minister’s reasoning presented for these changes separately as that deserves its own space.

Here I present a summary of the changes announced this week to the Capped Family Stream of New Zealand’s Residence Programme. These changes to both the Parent and Sibling and Adult Child categories are significant and come into effect almost immediately (May 16th 2012).

Deep Concerns

At first reading I am extremely concerned about how these changes will affect those who have already paid the NZ government $780 to lodge their applications.

It appears that applications on hand, especially those in the Sibling and Adult Child category, have been relegated to a point in the queue which can never be reached because categories in front of them will be constantly replenished (and over-subscribed) meaning these applications may never be processed.

If this is the case I shall be investigating the legal position on this – taking money for services which will never be provide (even services which will be provided in ‘several years’) is likely to be a serious breach of contract and deeply unfair.

Parent Category

Closure

The Parent Category will close from May 16th 2012 until July 2012 (date yet to be decided) at which time the new rules will be in place. The new rules will implement a fresh two-tier system with the same quota for parents of around 4,000 places per year.

Requirements on health and character will not change but an English language requirement has been added and the ‘centre of gravity’ rules changed. Parents will not be able to have any dependent children.

A two-tier system The Parent Category is currently run on a two-tier system splitting the quota between the fast tracked Parent Retirement Category (which includes a requirement for $1.5 million in settlement and investment funds) and everyone else.

The Parent Retirement Category will remain relatively unchanged, but changes implemented from May 16th create a new two-tier system within the other Parent Category:

Tier 1 requirements:

have a guaranteed lifetime minimum income of NZ$27,203 per annum for a single person or $NZ39,890 per annum for a couple, or

bring at least NZ$500,000 in settlement funds to New Zealand, or

have a sponsoring adult child who has an annual income of at least NZ$65,000, or joint income of NZ$90,000 when combined with their partner’s income.

Tier One applicants will not be subject to a “centre of gravity” test whereby the number of adult children in New Zealand need to be at least as many as the adult children in the home country.

Tier 2 requirements:

Tier two applicants must have a sponsoring adult child who hasan income of at least NZ$33,675 per annum, and

Any other children the applicant has must live outside the countryin which the applicant lives.

The effect of changes

For most parents this change to the Parent Category will cause very little difference.

The Parent Category already plays second fiddle to the Parent Retirement Category (for parents with $1.5 million in their pockets) which has first bite at places in the quota). In my experience almost all parents will have a pension, settlement funds, or children earning a reasonable salary.

The main change is for the sponsor as they will now be responsible for covering any costs to government of their parents for ten years instead of five.

I can’t imagine this will make much difference to government costs as in the last census migrants (as in all migrants including parents) were shown to contribute over $3,000 to the economy each per year. Rather than acting as a drain migrants actually add wealth.

An extra tax on migrants

One of the changes made to the Parent Category that will create a difference is the introduction of an Expression of Interest costing $420 to be made prior to any application. The reasons for this are officially given as:

The extra NZ$420 fee for Parent Category EOIs pays for the work INZ undertakes in processing them. This work is separate from the work done in processing Parent Category applications, so INZ needs to charge a separate fee for it.

The immigration department’s costs of processing applications are met by fees collected from migrants. Until recently the amount being paid by migrants always met the costs of the INZ meaning that the amount being charged to migrants was about right.

However from January 2010 policies were introduced by the then Immigration Minister Jonathan Coleman which intentionally cut the department’s income through reducing the number of applications accepted through the Skilled Migrant Category by nearly a third.

The effect of this change was naturally a deficit calculated by the department to be likely to reach $44 million by the end of June.

I was wondering how the department was going to recoup this massive sum, nearly a quarter of their annual budget, and here is part of their answer: an EOI system which is effectively a new tax on migrants.

A long wait for Tier-2

As I mentioned in my article on the changes to the Sibling/Adult child category the quota for the sibling and adult child component of the Capped Family stream is being stripped away. Applications already entered will be processed in date order if there are any spaces left after Tier-1 of the Parent Category has been filled.

This means a wait of potentially several years for the over 6,000 sibling and adult child applications currently held by the immigration department.

The wait for Tier-2 of the Parent category is likely to be even longer as these will be added to the back of this existing queue which will be processed in date order.

As a result it is likely that any Tier-2 application entered after July 2012 when this stream reopens will wait at least several years to be allocated a case-officer to process what are generally fairly simple cases for healthy applicants who can demonstrate their relationship to their sponsor.

Sibling/Adult Child Category

Closure

This category will be closed from May 16th and no applications will be accepted after the 15th.

What happens to existing applications?

The INZ have confirmed that applications entered before 16th May will be processed, unfortunately it looks like this is going to take longer than expected. A lot longer.

For the past couple of years applications have sat gathering dust for an average of 2 years before a case-officer was allocated and processing could begin. This was causing some problems for applicants because during that time while they needed a job offer which would stay open for them they had no right to be in New Zealand unless they could get some other temporary visa to allow them to work.

That ‘two years’ just turned into ‘several years’ because of the changes announced today.

The new Parent Category will have a quota of approximately 4,000 people per year, a drop from the old Capped Family Category quota of between 4,950 and 5,500 per year as only the parent quota remains.

That quota will be initially filled with Tier-1 Parent Category applications. If the quota is not filled then other applications will be collected to meet the difference:

Existing Sibling and Adult Child applications will be processed with other Parent Category applications in date order, only after tier one Parent Category EOIs and if numbers allow.

A long wait

The number of applicants with the immigration department for what is now the old Capped Family Stream (parent, sibling and adult child) has been steadily rising despite the best efforts of the department for years because numbers being entered were higher than the quota.

The most recent immigration department figures available (January 2012) show 6,028 applications on hand for this stream.

How long it will take to clear this backlog is anyone’s guess, but it is likely that it could take a very long time indeed. Requirements for Tier-1 of the new Parent Category are likely to be met by the parents of skilled migrants who have sold a home to come to New Zealand or draw an overseas pension meaning that it is possible that the quota of 4,000 people (i.e. 2,000 couples) will be filled every year leaving no space for these older applications. Certainly in recent years this quota has been oversubscribed by parents.

The result of taking away the quota for siblings and adult children, squeezing this in to any gap left in the parent category, will be that thousands of people who have entered applications in good faith will now have to wait considerably longer for their applications to be processed.

Many will be forced to give up their plans of living in New Zealand if they cannot use the Skilled Migrant Category or face living in limbo for what is likely to be several years.

For parents falling into the new Tier-2 stream the situation appears to be even worse. Their applcations will be added to the 6,028 and processed in date order. Any new applicants will know that they have at least 6,000 other people standing in front of them in the line and are unlikely to reach the head of that queue in their lifetime.

Why government could not have continued processing applications in the same way without accepting any more I don’t know, but I suspect that it has something to do with the immigration department’s deficit and a need to reduce operating costs.

As that deficit was created intentionally as a result of policies introduced by the last Minister this knock-on effect is particularly unfair and may well cause many skilled migrants to change their plans about moving to New Zealand.